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CMS blocking some home health agencies, ambulance suppliers from reimbursements

The Centers for Medicare & Medicaid Services, hoping to stop fraudulent repayment claims before they occur, is temporarily blocking several home health agencies and ground ambulance suppliers located around the country - including in Detroit - from enrolling in and receiving reimbursement from the Medicare, Medicaid and Children's Health Insurance programs.

The affected entities are located in Detroit, as well as Chicago; Fort Lauderdale, Fla.; Miami; Dallas; Houston; and the Greater Philadelphia area. The freezes are allowed under a provision in the Patient Protection and Affordable Care Act that aims to move the CMS beyond a “pay and chase” fraud model to one that's focused on prevention, CMS Administrator Marilyn Tavenner said in a statement last week.

“Today's announcement shows we are continuing our intense fight against fraud, waste and abuse in these vital healthcare programs,” Tavenner said. The agency performed a similar enrollment moratorium in July 2013.

The CMS chose to focus on these areas following consultation with HHS' Office of Inspector General and the Justice Department, which found a disproportionate number of providers and suppliers relative to beneficiaries along with extremely high utilization in these areas.

Barry Scott Cargill, executive director of the Michigan Association for Home Care, said he believes the problem of Medicare fraud in Wayne County has been compounded by increasing enforcement around the country, which has caused some home health agencies perpetuating the fraud in other cities with the moratorium to move into it.

“One reason Wayne County seems to attract those individuals is because Michigan doesn’t require licensure of home health agencies like other states do,” said Cargill.

He said imposing the moratorium throughout southeastern Michigan will help prevent those fraudulent agencies from moving out of Wayne County into the surrounding counties.

Since the moratorium will not affect those already enrolled in Medicare, Cargill said patients will continue to be well-served as the state has “no shortage of home health agencies.”

He said he supports the moratorium coming to Michigan, along with the state’s own progress in passing Senate Bill 71, which would require licensure of home health agencies in the state.

“Medicare fraud is a large problem in the country, and these are tools the state and federal government can use to combat it,” said Cargill.

The hold is expected to last for six months starting Jan. 31. However, the CMS said it may lift the moratorium earlier or extend it another six months by issuing another notice in the Federal Register.

In another preventive measure, the CMS later this year plans to have owners of newly enrolled home healthcare and durable medical equipment agencies, as well as other providers it deems to be high risk, undergo fingerprint-based background checks.

The background checks are expected to affect as many as 7,500 executives each year, according to the CMS. If they fail, they and their companies could be prohibited from participating in CMS programs.

To pass, an executive must not have been convicted in the last 10 years of a felony charge for crimes such as murder, rape, extortion, embezzlement, tax evasion and any act that endangers Medicare beneficiaries.

Bridget Vis of Crain's Detroit Business contributed to this report.

Modern Healthcare is a sibling publication of Crain's Detroit Business.